The Irish property market is experiencing a rebound with a period of falling house prices – seen in the early months of 2023 – coming to an end as the year entered its second half.
The latest report from the property website MyHome.ie captured asking price inflation nationally running at an annual pace of just over 4% between July and the end of September.
In Dublin, prices being sought for properties in the third quarter were up on average 3% on the same time last year.
In the rest of the country, asking price inflation was running at just shy of 5%, the report concluded.
The findings are roughly in line with a similar analysis carried out by daft.ie last week which showed asking prices rising by 3.7% nationally.
The official figures on property prices from the Central Statistics Office showed prices nationally rising by 1.5% in the year to July, the slowest annual rate of price growth in almost three years.
However, these figures are based on actual transactions as opposed to asking prices.
According to the MyHome analysis, the median asking price stood at over €330,000 in the third quarter of the year with the median price in Dublin standing at €425,000 while elsewhere around the country it stood at €285,000.
While price inflation for areas outside of Dublin continues to exceed that in the capital on an annual basis, quarter-on-quarter the rate of inflation in Dublin has started to outpace the rest of the country again.
The MyHome study captured a 0.6% increase in asking prices nationally in the third quarter with inflation of 1.3% in the capital and 0.4% outside of Dublin.
Elsewhere, the report concludes that homes are now being sold for 3% over asking compared to 1% at the start of the year.
Much of that price activity is being driven by a lack of supply, which both the MyHome and daft.ie reports identified.
There were 13,400 properties available for sale on the MyHome terminal in the third quarter – well below the pre-pandemic figure of 20,000-plus.
“This equates to just 0.6% of the 2.1 million total homes in Ireland,” the report commentary states.
It adds that there were 7,675 new listings on MyHome.ie in the third quarter – down nearly 40% on the year.
“The period of falling house prices we saw earlier in the year has come to an end, with the underlying imbalance between demand and supply providing fresh impetus to the market,” Conall MacCoille, Chief Economist with Davy and author of the MyHome.ie price reports said.
He added that housing demand had remained resilient, despite interest rate hikes and that Ireland had avoided the house price declines seen in the UK and other countries for a number of reason.
“First off, the Irish economy has performed far better with employment already 12% above pre-pandemic level, an extraordinary pace of job creation. Hence, housing demand has remained robust.”
“Second, the Irish housing market has been less liquid than other countries, so less vulnerable to the unexpected rise in ECB rates.”
Robust demand, weak supply
Conall MacCoille told Morning Ireland that valuations got stretched during the pandemic which was followed by an adjustment in pricing.
“By the summer, things appeared to have turned around,” he said, noting that prices were falling in many other economies.
“It’s robust demand, it’s weak supply and while there was a period of correction, that appears to be over now and we’re seeing house prices rising again,” he explained.
Mr MacCoille said his forecast for 1.5% property price inflation this year was now looking ‘a little bit weak’.
“What we’re seeing is house prices seeing very modest gains along with pay growth so affordability isn’t getting particularly worse or better,” he said.
“The big issue here is that we should be building 40,000 to 50,000 houses [a year] to eat into pent-up demand and that’s not just happening at the moment.”